Why does the value of money decrease in time? e.g. why is it that my grandfather used to make 5 dollars a day and was stiil able to buy a house, and today person can make 30 dollars an hour and have to hustle to get a mortage paid off?
by 
chuck
ANSWERS: 5
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The only reason I can think of is inflation. Inflation eats up the value of your money.
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Inflation. Since the value of money is arbitrary and the Federal Reserve is allowed to print as much money as it wants, since it's a business and not a government entity, money becomes less valuable over time. Add in the fact that Americans are almost universally hated, and that lessens the value of the dollar. The only thing that's been holding us up for all these years is the fact that most oil is traded in good ol' USD; even that is changing, though, ad when oil is universally traded in whatever currency, with euros as some semblance of a standard, then our nation's economy will just crumble and disappear.
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Your grandfather's house had four small rooms, an unfinished basement and attic, single-pane windows, an outhouse behind it... Houses keep getting bigger and nicer with more and more luxuries as standard equipment. Where's the last house you were in without wall-to-wall and air conditioning? You might as well complain that cars aren't as cheap as the $295 Model T. The Model T needed a new tire every 200 miles, an oil change every 1000, and a new engine or at least a complete ring job at 40,000. However, it is true that our money slowly inflates, because the government has found that that is a relatively painless way to tax us. Everyone screams about rising gas prices, not realizing that most of the price rise goes to Washington and is because of Democrat policies such as refusing to let us build new refineries for the last 30 years, drill offshore, drill in Alaska, and use nuclear fuel for generating electricity.
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mushroom Those examples are biased. While it's true that you cannot buy a new car that is a "basic" as they were of old, a loaf of bread and a quart of milk are still basic necessities, and a dime isn't going to get you either today.
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In our current economic system, the value of money has to decrease as the value of the products increases. Your salary should increase the same as the house payment when compared to you grandfather. Look at some of these articles: http://www.google.com/search?hl=en&q=value+of+money+over+time&aq=0&oq=value+of+money
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Because the cost of living increases annually. Rent, cost of homes, cars, groceries, popcorn in the movies, the cost of your health insurance through work. When that all costs more you have less. That means you stop going out for burgers and sneak in your own snacks at the movies.
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